Call Ski Invest: +44 (0)1428 642022

Please enter your username or email address. You will receive a link to create a new password via email.

Leasebacks French Leaseback Scheme


Ski properties, may be offered under the French Leaseback Scheme, referred also as French Leasebacks, Leasebacks or Ski Leaseback

Leaseback Definition:

Arrangement in which one party sells a property to a buyer and the buyer immediately leases the property back to the seller. The seller /management company takes responsibility for the maintenance, up keep and promotion of the apartments for rent. This arrangement allows the initial buyer to make full use of the property while not having capital tied up in the asset. Leasebacks are virtually free of tax.

French Leaseback Schemes

(For more information click to see FAQs)

Leaseback or French Leaseback Scheme For Ski Properties:  The French government created the leaseback scheme to encourage and promote investment and tourism in France. The French Ministry of Tourism oversee this national scheme. Developers are financially bonded and all contracts are Government regulated.

As with the definition above, under the leaseback scheme, the purchased property is leased back to the seller/management company who specialise in the tourist management, maintenance and rental of these ski properties for a period of 9 – 11 years. Owners receive a guaranteed annual return (typically 2-6%) which increases with inflation, irrespective of occupancy of the property and NET of all communal charges, maintenance and running costs.

VAT Refund
The buyer also receives a refund of the VAT, which for all new off-plan properties, is 20%. This refund can effectively be used towards the deposit, as you would fund the property discounted by the 20%. This is when new developments offer mortgage Loan to Value (LTV) of 80%. Mostly, though, leasebacks qualify for a 70% LTV. For refurbished properties, the VAT element may be much reduced or may not apply.

Generally, the developer pays the 20% Vat element of the purchase price and there is no ‘refund’.

Lease Period
The period of the lease is generally 9-11 years. As the mortgage/loan period is normally 20 -25 years, the management company will renew the lease for a third period but only if the rentals are successful.

Personal Us
Leaseback options cover 100% investment, which is no weekly use by the investor or a series of options for weekly use during the winter and summer seasons. The more weeks used and the busier the season, the less the guaranteed rental return. The year is generally divided into high season, mid season, and low season. The owner has first choice of the weeks to spend at the property, which must be specified at the start of each year and will normally be valid for a 3 year period.
Tax Incentives
Leaseback schemes are an extremely popular way to purchase a property in France because they provide the buyer (if a resident in France) with attractive tax incentives and also allow the purchaser an amount of personal occupancy whilst benefiting from an immediate saving on the purchase price. In most cases the annual rental income is guaranteed and index linked for the period of the lease. The introduction of new buyer incentives back in early 2009 for the purchase of French property for renting purposes, turned a seemingly dead property market into a thriving, buoyant market place, virtually overnight The loi Scellier, as it is called (named after the French politician who proposed the idea) offers a reduction in income tax of up to 37% of the acquisition cost of a French rental property (for French residents). Due to these financial advantages, leaseback schemes have “mushroomed” and leaseback developments in sought after locations sell very quickly. However, it is important, that buyers understand that a leaseback property cannot and will not meet the same requirements as a property purchased as a second home. The success of a leaseback development relies on two specifics: its location and the long term performance of the rental management company.

For UK buyers, leasebacks are also attractive investments, in that they are normally tax free, apart from a few of the later investment years.


  • 20% VAT Rebate, which could acts as your deposit, but which is normally paid by the developer.
  • Low Mortgage Interest Rates – Fixed for 20 – 25 years
  • New Tax Breaks Introduced in 2009
  • Personal Use – have holidays in your investment
  • Located in popular tourist areas
  • Low Risk Investment, with a Guaranteed Income
  • Owners discount for extra weeks holiday
  • Exchange programme with management company residences in winter and summer

Leaseback Schemes in Other Countries

Switzerland, the other country we specialise in, has no government backed leaseback scheme. However, developers do promote ‘leaseback’ properties but generally these have no guaranteed rental return – or more importantly – no guaranteed index linked rental return, as offered by the French leaseback system. To combat the ‘cold beds’ problem in the Valais area, foreigner authorizations are being made available on the basis that the buyer will rent out or offer the property for rent for the majority of the year. These schemes should be considered carefully and legal assistance sought. Again, if you are looking for a second home in Switzerland, this investment option may not be for you.


Leaseback FAQ’s

How long has this French Leaseback Scheme been available in France?
Since 1976.

Is it possible to invest in more than one leaseback property?
Invest in as many as you wish. The scheme is open to non-French residents and non-European residents.

Why is there a discount (or VAT refund) on the purchase price of leasebacks?
The French government has given tax incentives to developers to encourage them to construct ‘Residence de Tourisme’ developments – accommodation for tourists in popular tourist areas. The VAT refund is then passed on to purchasers to act as an incentive to get them involved in the scheme. Even now, there is a significant shortage of holiday accommodation in France, the most visited country in the world!.

Are leasebacks always new developments?
No, some are renovations or refurbishments

For new developments the VAT return is 20%, is this the same for refurbished leaseback projects?
The scale and location of the refurbishment will determine the percentage rebate. A comprehensive refurbishment could possibly be viewed by the authorities as a new development, in which case the full 20% would be refunded or it may be reduced to 10%, if a lesser refurbishment. If it is a minor refurbishment then there will be no VAT refund.

Is the leaseback scheme permanent ?
No, this opportunity will be terminated by the French Government when they consider it has met the needs for this type of residence and satisfied the increase in tourist residences. There are no indications that it will end yet, though.

Can I get a mortgage to buy a leaseback property?
Yes, it is the same as any other property, as you buy the freehold.

How do I go about reserving a leaseback property?
With leaseback properties, there is pressure to move quickly, because buyer’s literally queue up to buy. You will need to place an ‘option’ (reserve it) on your preferred property. This will hold it and prevent it from being sold for a period of 24/48 hours while you send the holding deposit to the Notary. The deposit could be anything from a fixed sum or 2%, 5% or 10% of the Vat inclusive sale price.

Does the management renew the lease automatically?
Generally, the leases are renewable but check the requirements of the lease contract.

Is the lease always for 9 years?
No, leaseback companies can ask for any period from nine years, which is the minimum period. The common lease periods are 9 and 11 years.

Is there a guarantee of the rental occupancy?
The occupancy rate of the property is the responsibility of the management company. Your rental income is guaranteed even if the property is empty. Be sure to only buy a leaseback with guaranteed index linked rental returns.

Are there leaseback management charges?
During the lease period, all costs of management, maintenance, repairs, furniture repair/replacement and services such as electricity and water are paid by the management company

Do I have to buy the property furnished?
Yes, leaseback properties are sold fully equipped and fully furnished, ready for letting. The cost of the furniture pack is often shown in the price list.

Do I have to give notice before the end of the lease?
Yes, this is a contractual requirement. The usual period would be 6 months but this will be clearly stated in your contract.

How much could I earn on my investment?
The leaseback Return On Investment – R.O.I. – is usually between 2% and 5% – sometimes more. This is the net income from the management company. Add to this the capital appreciation of the property – particularly if you bought off-plan.

Do I have to renew or redecorate the leaseback property during the lease?
No, during the period of the lease you do not have the responsibility of renewing items or replacing furniture. This is for the management company to take care of. They also look after the property’s land.

Are there penalties if I have to sell the property prior to the end of the Leaseback term?
It has been possible since January 2006 to sell leaseback on at any time without repaying the VAT which was recovered during the purchase – provided the new buyer takes on the leaseback arrangements. However, make sure you know the liabilities outlined in the lease if you do sell prior to the end of the term.

Can I revert to Owning the Property as a Classic Freehold?

Yes, this is possible. However, with the exception of only two developments that we sell, the management company have the right to charge you up to 2 x the annual rental return.

Plus, you will need to pay back the Vat, which is amortised over 20 years. So, for instance, if you decide that you want the property as a classic freehold, without usage restrictions after the first 9 years, say, you would have to pay back 11/20ths of the Vat.

Also, you will have to pay the non-subsidised annual service fee or in some cases have to pay extra to use the pool facilities, for instance.

Are there any other costs that I will need to pay?
You, as the owner pay the annual ‘Taxe Foncière’ – a local tax. Although there is normally a payment holiday on new properties for the first 2 years. There is also a service charge or co-propriete tax.

When I reserve my preferred weeks, will I be able to stay in my own property?
You will usually be able to stay in your own property if you have notified the management company by the required date. Late bookings may result in alternative accommodation on the same development. You may also be able to swop locations for those weeks if you would like to take advantage of the other management companys’ portfolio of developments.

If I can’t use all my allocated weeks, what happens then?
It is possible to sub-let the property for those weeks, which you would have to do privately to friends or family.  You must not openly market the weeks, though. This practice maybe restricted in the lease, though.

Can I use more than my allocated weeks?
If you required weeks over and above those allocated to you, you will be able to obtain them at discounted rates.

With the rental income option, is the income guaranteed?
The rental income is guaranteed throughout the period and is usually paid 3 months in arrears.

What happens at the end of the Leaseback period?
The property is yours to do with as you wish. You can live in it, sell it, rent it out privately or you can negotiate a new lease with the management company. However, by law the management company have the right to renew the lease after the initial lease period. Make certain you know where you stand. Your investment in a leaseback is long term, therefore the renewal of the lease will benefit you and the management company.

Would I get a higher rental return if I bought the property outright?
You could get a higher rental return but it would not be guaranteed – or index linked. Renting the property yourself means that you:

  • Will need to go through a rental agent who will charge 20% -35% of the fee for advertising, laundry, linen, cleaning, handovers, etc.


  • Undertake all rental activities on a DIY basis. In both cases you would be responsible for the replacement, refurbishment and redecoration of the property.

This all sounds promising, are there any pitfalls?
Understand the options available on completion of the lease. The management company may have the right to renew the lease. Check if any penalties are incurred if you have to sell the property early. Reduce the risks of the management company going into liquidation by dealing with well established companies with a proven track record. Remember you retain ownership of the property whatever happens.